Local FX Market
US dollar was on bullish mode against Bangladeshi taka in this weak. The rally resulted from higher demand of greenback mainly due to import payments for capital machinery, scrap vessels and industrial raw materials.

Money Market:
Bangladesh Bank borrowed BDT 2,032.00 million by the Treasury bill auction held on Sunday, compared with BDT 1,654.00 million in the previous week's bid. The weighted average yields of 5-Y t-bill fell to 6.94 percent from 7 percent.

The call money rate was bearish this week. Call money rate ranged between 3.50-4.00 percent in the beginning of the week. It continued to ease throughout the week and closed the weak at 2.75-3.40 percent.

International FX Market
In the beginning of the week, the dollar rose to its highest in five months against the euro on Monday, continuing to benefit from recent upbeat US data after a weekend Group of Seven meeting threw up no obstacles to the greenback's rebound. Already on a roll after surprisingly strong US durable goods data on Friday, the dollar extended gains to its highest since late November. A better than expected German business sentiment survey gave the euro ground to cut losses in the European session. Investors are expecting that interest rate differentials between euro and dollar would narrow by end of this year.

In the middle of the week, the dollar bumped around recent ranges against major currencies on Wednesday as traders looked to data this week and next week for clues on the timing of higher US interest rates. The yen was best performer recovering ground on the euro and dollar after tumbling one percent on Tuesday. Encouraging comment from the ECB president also helped the euro to gain against the greenback.

The US dollar hit a six-week high against the yen, rose against commodity currencies and traded near recent peaks on the euro by the end of the week as investors bought the greenback on fresh doubts about China's economy. The worries emerged from Chinese Premier Wen Jiabao's comments on Wednesday that the country needs forceful measures to cool red-hot growth and Thursday's reports that authorities ordered some smaller banks to halt lending temporarily. High-yielding currencies such as the Australian dollar took hit from price falls in precious and base metals resulting from doubts about Chinese growth and even a surprise rate hike did little to help New Zealand dollar. An increasing number of economist now expect the Federal Reserve to raise its key federal funds rate by August, narrowing the yield advantage that currencies such as the euro and sterling have over the dollar.

Standard Chartered Bank